Custer County approves final transition from sick/vacation to single PTO bank

The Custer County Board of County Commissioners voted to adopt Resolution 25-30, finalizing a move from separate sick and vacation leave banks to a single paid-time-off system and setting firm dates for how legacy balances will be handled.

The change is intended to fix longstanding payroll-accrual errors that occurred during the county's transition to a new payroll/timekeeping environment. Commissioners said the change will provide a single, auditable PTO balance for employees and give auditors a defined liability to report on the county's books.

Commissioners and staff described a complex problem that began when the county moved to a combined PTO system but failed to stop accruals for the older sick and vacation buckets. That error allowed additional hours to appear on employee pay stubs even after PTO began tracking. County staff and department heads told the board they had tracked hours on local spreadsheets to protect employees while the mistake was investigated.

Under the adopted resolution: existing consolidated compensated‑leave balances will remain available to employees through Dec. 15, 2025, and that amount will be the figure reported to auditors as the county's incurred-but-not‑paid compensated‑absences liability. Sick leave that remains after that date will no longer be available. Vacation balances will be rolled on top of PTO at year end; if the resulting PTO exceeds the county cap, employees will not accrue further PTO until their balance falls below the cap.

Board members and staff discussed legal and personnel risks. County representatives said the approach is intended to avoid a disruptive forensic reversal (where each employee's entire multi-year record is recalculated) and to provide a clear closing date for audit purposes. Staff said auditors and accounting staff reviewed the proposal and that the plan reduces the county's long-term audit liability.

Several department heads and public commenters urged caution, asking that employees not be penalized for errors the county made. Department heads said some employees had exhausted the accidentally-accrued time in good faith, while others had not, and that reconciling those differences exactly would be time-consuming and likely contentious.

The board approved the resolution after debate and public comment. Commissioners said managers will monitor PTO accruals monthly going forward and provide employees and department heads updated, corrected leave statements.

The board also directed staff to continue working with auditors to finalize the liability number for the current audit and to provide clearer monthly reporting to department heads and elected officials.

Ending: The resolution sets a clear administrative path to end the mixed-accrual situation and gives the auditors a single figure to use for the current fiscal audit. Staff said more detailed payroll reconciliation work will continue through the year and that the county will provide additional guidance to employees on how their final PTO balances will be shown on pay stubs.